Palm Garden Hotels repays debts parent company, subsidiary

Palm Garden Hotels PLC says it has repaid related property borrowings of Rs. 1,093,002,071.00 obtained from Browns Hotels & Resort Ltd and Rs. 207,060,925.00 from Eden Hotel Lanka PLC on 31 January 2015.

Palm Garden Hotels is a subsidiary of Browns Hotels & Resort Ltd and Eden Hotel Lanka is a subsidiary of Palm Garden Hotels.
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NDB to issue Rs. 05 billion debentures

The National Development Bank (NDB) is to issue listed, rated, unsecured, senior, redeemable debentures for Rs. 05 billion with an option to go up to Rs. 7.5 billion.
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Eastern Merchants land at Vauxhall Street, Union Place up for sale

Eastern Merchants PLC is to sell its land and buildings at No. 284, Vauxhall Street, Colombo 2 and No. 341, Union Place, Colombo being one block 134 perches in extent. This property has been valued at Rs. 939,000,000 in 2014.

The funds thus raised are to be invested to diversify the company’s business from its traditional commodity trading into new business ventures focusing on value addition. It also proposes to utilize a part of the sales proceed to settle its outstanding debts.

The Eastern Merchants PLC Board has approved the sale in principle and is to summon an Extraordinary General Meeting on 16 March 2015 to table a resolution seeking shareholder approval.
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Sri Lanka wins delay over UN war crimes report

(Reuters) - Sri Lanka's new government won a six-month delay on Monday in the publication of a report on alleged war crimes, after the U.N. human rights chief praised its willingness to open the country up to scrutiny.

Sri Lankan government forces have been accused of widespread human rights violations in the final stages of the civil war that ended in May 2009, including most of about 40,000 killings of Tamil civilians in the final weeks of the conflict.

The U.N. Human Rights Council voted last March to investigate war crimes in Sri Lanka, saying then President Mahinda Rajapaksa had failed to do so properly. The U.N. inquiry, advised by three experts led by former Finnish President Martti Ahtisaari, was due to report back next month.

U.N. rights chief Zeid Ra'ad al-Hussein said he had recommended deferral of the team's report until September, and the president of the Human Rights Council had agreed, given "the changing context in Sri Lanka, and the possibility that important new information may emerge which will strengthen the report.”

The new government had given clear commitments indicating it was prepared to cooperate "on a whole range of important human rights issues – which the previous government had absolutely refused to do – and I need to engage with them to ensure those commitments translate into reality.”

Zeid stressed it had been a difficult decision to allow the delay and he vowed not to let wrongdoers off the hook.

“I am acutely aware that many victims ... might see this is as the first step towards shelving, or diluting, a report they have long feared they would never see," he said.

A senior official of the U.S. State Department welcomed the move and pledges made by the Sri Lankan government.

The official, who did not want to be identified by name, said the United States was "encouraged that a way forward has been agreed upon that satisfies the concerns of all parties" and the delay would "allow space for the new government to demonstrate their willingness to cooperate on human rights issues".

A Sri Lanka Foreign Ministry official welcomed the deferral.

"This is timely and coincide with the new government's move to establish democratic process for accountability issues," the official said. "This will give space for the domestic investigation process."

Sri Lanka had said it needed the delay to give it time to establish a new judicial mechanism to deal with the allegations.

In a letter to Zeid seen by Reuters on Monday, Foreign Minister Mangala Samaraweera set out reforms the government planned to implement within 100 days, including ensuring justice for war crimes.

Samaraweera said he had invited Zeid to Sri Lanka, and all media restrictions and blocks on news websites had been lifted.

(Reporting by Tom Miles; additional reporting by Shihar Aneez in Colombo and David Brunnstrom in Washington; Editing by Tom Heneghan and Marguerita Choy)

Govt to borrow US$ 1.5 b in sovereign bonds

Hiran H.Senewiratne

The government is looking to tap global capital market to borrow up to US$ 1.5 billion through sovereign bonds before the end of April to cut commercial debts in government,sources said.

"The new government has said the real total debt at the end of 2014 including state-owned enterprises' borrowing was 88.9 per cent of gross domestic product (GDP), over the previous government's official figure of about 75 per cent of GDP, a Ministry of Finance spokesman said.

Sri Lanka will go to the market within the 100 days set out in the new government's programme. Sri Lanka has borrowed $5.5 billion through seven sovereign bonds since 2007 and it has tightened its yields. It last went to the market in April 2014 and raised $500 million by selling 5-year euro bonds at a yield of 5.125 per cent a year.

Heavy commercial borrowing for infrastructure, most of it from China, under former President Mahinda Rajapaksa has put the new government under pressure to pay debts.Finance Minister Ravi Karunanayake told at a seminar that main objective of this issue is to cut the $76 billion economy's fiscal deficit to 4.4 percent of GDP this year, the lowest since 1977, lower than last year's 5.2 per cent with Rs 258 billion ($1.94 billion) foreign borrowing.

He said they will ensure they will not be stipulating conditions on us. We expect the maximum that can be given at the best possible rate," Karunanayake said.

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Richard Pieris Group records 9 months PBT of Rs. 2bn

The Richard Pieris Group ended its first nine month’s performance with a Group Revenue of Rs 28bn and a Group PBT of Rs.2bn. The period under review evidenced a steady performance in most of its major sectors where the reported profits represent business profits, and do not include any gains of a capital nature.

Retail sector
The retail sector of the Group comprises of Arpico Super centres and the network of Arpico outlets across the island. The sector had a dynamic first nine months and as usual was very busy during the festive season with many promotional activities. The "Top Tips" campaign continued to maintain its popularity amongst customers. A very vibrant "Win the world this Christmas" seasonal campaign was also well received by shoppers where it offered air tickets to many a destination around the world.

Plastics and distribution sector
The plastics and distribution sector had a very successful first nine months performance reporting growths in terms of both revenue and profits when compared with the corresponding period of the previous year. The newly introduced hybrid water tanks continued to be a success in the market place. The introduction of a five layer mattress and its promotional campaign was popular and perceived by customers as an innovative product. The seasonal campaigns continued in the plastics and distribution sector with many complimentary offers and discounts.

Plantation sector
The Plantation Sector of the Group faced many challenges during the period under review with adverse weather conditions and low prices.

The Richard Pieris Group possesses 3 of the largest plantation companies in the country with diverse crops which includes high grown, mid grown and low grown tea, rubber, oil palm, coconut, cinnamon, cardamom, rambutan and other crops contributing to more than 15% of the Group turnover.

The plantation sector was adversely affected by low prices and production volumes. There was an increase in the price of Oil palm but there was a decrease in the
production volumes. Even the tea production decreased during the period under consideration when compared with the previous year.

Tyre sector
During the period under review the tyre sector continued to benefit from favourable raw material prices and expanded some of its services to new customers. Tyre sales of the brand "Nexen" continued to prosper and several new tyre sizes were introduced by the sector during the period under review.

Rubber manufacturing (exports) sector
The sector continued to thrive during the 9 months ended 31st December 2014. There was an overall improvement in the performance of the sector with most business units achieving the set goals.

The latex foam business continued to maintain its high standards and is in the process of setting up the world’s first organic latex sheeting plant at the Biyagama export processing zone. Richard Pieris Exports continued its success story from the previous quarter and many initiatives were undertaken to reduce waste levels and overheads.

Financial services sector
Though the Group is focused in its traditional businesses, diversification into financial services was successfully ventured over the past few years. At present Richard Pieris Group consists of its own insurance, stock broking, fund management and a finance company. (RPG)

Softlogic Holdings posts impressive results

Softlogic Holdings has posted impressive results in the third quarter as well as first nine months of FY2015.

The Quarterly Group Revenue increased by 46.4% to Rs.11.1 billion with the cumulative period of performance nearing Rs. 28 billion, (up 27.7%). This growth momentum was supported by the consolidation of Odel Plc’s results during the quarter in which a period spanning two months was included.

Consolidated Gross Profit was Rs. 4 billion, reflecting an increase of 36.6%, during the third quarter of the financial year with cumulative Gross Profit increasing 25.6% to reach Rs. 10.0 billion.

Operational expenses increased 41.5% to Rs. 2.9 billion during the quarter with collective operating expenses for 1-3QFY15 also growing by a similar rate to Rs. 7.7 billion. The increasing operational expenses were in view of the Group’s retail expansion and consolidation of Odel Plc.

Finance Income, which registered a 63.1% growth to Rs. 979.5 million during the nine-month period, declined during the quarter to post a loss of Rs. 243.5 million. This was due to mark-to-market losses on Asian Alliance Insurance Plc’s equity investment portfolio during the quarter. The life insurer’s fixed income also declined with the interest rates edging up slightly in the short term treasury/ bond market during the quarter. Rs. 750.1 million (up 42.1%) was transferred as share to life policyholders/insurance contract liabilities during the nine-month period whilst a reversal transfer of Rs. 135.3 million was made during the third quarter on the back of statutory actuarial valuation.

Finance expenses increased by 25.0% to Rs. 753.8 million during the quarter. However, the cumulative finance expenses registered a marginal increase to Rs. 2.1 billion. The increase in Group interest bearing borrowings was partially due to the debt funded acquisition of Odel Plc and Softlogic Finance Plc debenture issue that came in during the period under review. The low market interest rate regime is expected to continue despite the changes at the helm of the Central Bank given the benign trending of inflation.

Group PBT reported Rs. 709.0 million during the quarter taking cumulative PBT to Rs. 1.4 billion (up 39.5%). Profit after tax for the period during the nine months of FY2014/15 amounted to Rs. 1.1 billion (up by 37.4%) with 3QFY15 reporting Rs. 524.0 million.
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